California state Capitol building
The California state Capitol building in Sacramento. File photo courtesy of Sen. Toni Atkins’ office

California’s elected officials are considering one more tax on Californians and businesses. Senate Bill 1107 is not a tax as defined by law, but it has a similar effect. This bill will make driving a car in California even more expensive.

Industry experts estimate that drivers will pay $80 to $400 dollars more than now. Worse yet, the legislation’s ill effects will almost exclusively be shouldered by lower income drivers and small businesses in the Golden State.

The bill will double the minimum amount of liability coverage drivers are mandated to buy and drastically change how underinsured motorist coverage works. These proposed changes to car insurance will hurt all Californians, but especially lower-income drivers, at a time when they are already struggling to keep up with the highest inflation in 40 years.

Every dollar counts, especially when your budget doesn’t allow for sudden increases. I recall my less-than-prosperous days as a 21-year-old worker. I was paid $2- an hour and my car insurance was $4 a week.

Adjusting for inflation, my wages were slightly above what minimum wage workers earn today. Had my insurance gone up substantially, like SB 1107 threatens to do, it would have severely impacted my cost of living and tight budget. 

Supporters of this bill say they are trying to help drivers by making more coverage available so there is a larger pot of money for settlement after a car crash. The reality is these changes are completely unnecessary. Drivers are required under California law to have liability coverage. Today, drivers can buy as much liability and underinsured motorist coverage as they want to protect other drivers and themselves after a car crash.

SB 1107 would increase underinsured motorist limits from $15,000 for single-injury accidents, $30,000 for multiple-injury accidents, and $5,000 for property-damage accidents to $30,000, $60,000 and $25,000, respectively. Insurance premiums would increase significantly, severely affecting the quality of life for many Californians.

The changes would also increase costs for the 1.5 million small businesses in the San Diego region. And this comes at a time when inflation in general and gas prices in particular are soaring.

We don’t have to be insurance experts to understand that if minimum coverages are raised, more money will be paid out in claims and that will force higher premiums. The impact on some individuals and small business could be devastating.

If SB 1107 becomes law, California will also likely see an increase in uninsured drivers on the road. Currently an estimated16.6% of California drivers are uninsured. That is almost a third higher than the national average of 12.6%.

For a bill that is said to decrease the risk of financial disruption after an accident by creating larger payouts for victims — and their personal-injury lawyers, of course — SB 1107 could actually result in exactly the opposite.

How could our legislators consider such a bill? Don’t they remember the long economic recovery from the pandemic? SB 1107 seems counterintuitive to so much of the other work the Legislature has been doing.

Rising costs for insurance premiums will force more drivers out of insurance, as prices become a barrier that so many will not be able to afford. A larger driving cohort without insurance will cost  Californians millions of dollars, and put those uninsured folks at massive risk to be financially devastated.

The Legislature should help Californians by voting against Senate Bill 1107. Or at least do Californians a favor and put the question on the November ballot so we can have our say.

Raoul Lowery Contreras is a Marine Corps veteran, political consultant and author of the new book White Anglo-Saxon Protestants (WASPS) & Mexicans. His work has appeared in the New American News Service of the New York Times Syndicate.